Did Uber just win the taxi war?

Published at Nov 23, 2015, in Features

In a major shake-up to the taxi industry in Australia, New South Wales is set to legalise the use of Uber X in the state.

According to a report in The Daily Telegraph the government is set to outline proposed legislation to legalise the use of the service [$].

The ride-sharing app has courted controversy and ignited a war of words in the state and other jurisdictions, with the taxi industry arguing that the service is unfairly undercutting it and is only able to do so because it is not required to pay registration or ongoing training fees.

While the use of the Uber app to order regular taxis is legal, it is the use of private citizen drivers with Uber X which has caused controversy as prices for the service are often cheaper than using a regular taxi.

According to the Daily Telegraph, the full changes will be outlined later today but are expected to include forcing Uber X drivers to pay registration fees while the incumbent taxi industry will be offered compensation.

Technology in the taxi industry

The taxi industry in Australia traditionally has been slow to adopt the disruption the likes of Uber have already wrought, without even being illegal.

However, it hasn’t been helped by legislators and regulators.

Earlier this month the industry’s attempt to build an Uber-esque app, iHail, were dealt a blow by the Australian Competition and Consumer Commission.

iHail was a joint venture app between several taxi operators, combining their databases and systems into one app to make it easier for people to order a taxi from their smartphone.

Initial participants were to be Yellow Cabs, Silver Top Taxi Service, Black and White Cabs, Suburban Taxis, and Cabcharge.

However, the ACCC looked dimly upon the plan, saying that the app would be outside the spirit of competition in the industry.

“The ACCC considers that the ihail app would have a significant impact on competition in the taxi industry, which could impact prices and quality of service,” ACCC chairman Rod Sims said.

“The ACCC accepts this app would provide a more convenient way for consumers to book taxi services, but in the draft determination the ACCC takes the view that this comes at too big a cost to competition

“If it becomes the dominant booking app, it may also reduce competition by impacting the commercial viability of existing apps operated by individual taxi networks, as well as those operated by third parties such as goCatch and ingogo.”

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